Walgreens looks to credit card, financial services to boost revenue

Walgreens said Wednesday it will offer a growing list of financial products for customers — including a co-branded credit card and a prepaid debit card — as it tries to win more of their wallets and help them manage pricey medical expenses.

The credit cards will launch in the second half of this year. They will be part of the Mastercard network and issued by Synchrony. They will be linked to Walgreens’ new loyalty program, which the company relaunched in November with a new name, perks and Covid pandemic-inspired features, such as curbside pickup and delivery through DoorDash and Postmates.

Walgreens and its drugstore peers are adapting to fast-changing consumer behaviors that have accelerated during the pandemic. Walgreens has looked to new business opportunities, including a deal with VillageMD to open hundreds of primary care clinics at its stores.

John Standley, Walgreens president, said the company sees financial services as one of those growth drivers, too. “As we continue to focus on creating new revenue streams, we look forward to exploring and introducing even more health and well-being payment initiatives in the near future,” he said in a news release.

It’s the second major retailer this week to announce plans for expanding into financial services. Walmart said Monday that it is creating a fintech start-up with Ribbit Capital, one of the venture capital firms that’s backing Robinhood. The separate company will be majority-owned by the big-box retailer.

The pandemic and recession have put pressure on many families, who are trying to stretch their money as they pay the bills and cope with reduced hours or unemployment. During the holidays, for example, a growing number of consumers looked for other ways to finance their purchases. The use of “buy now, pay later” for online orders grew 109% during the holiday shopping season that spanned from Nov. 1 to Dec. 31, with the biggest run-up taking place the final week before Christmas, according to a recent report by Salesforce.

Affirm Holdings, a provider of installment loans to online shoppers, will begin trading on Nasdaq later Wednesday.